The China-Russia gas relationship – what’s ahead?

Russia and China’s economic and political interests have converged over the past decade. This year, Gazprom has been proactively promoting Power of Siberia 2 via Mongolia – a commercially attractive yet geopolitically risky route. Besides cross-border pipelines, China is also looking to participate in Russia’s upstream sector, which boasts abundant, low-cost resources. Chinese players could further engage in NOVATEK’s future developments, such as Obskiy LNG and Arctic LNG-1. Nonetheless, Russian gas faces challenges as China seeks a balance between different import routes to diversify supply options. LNG’s growing role in meeting seasonal demand could constrain the ramp-up of Russian pipeline projects. The outlook for Russian gas supply to China may look volatile, but their energy cooperation will strengthen while deteriorating relationships with the West drive the two countries even closer.